Covenant United Church of Christ
What is an Endowment Fund?
In the simplest terms, an endowment: An endowment is a financial asset donation made to a non-profit group (CUCC) or institution in the form of investment funds or other property that has a stated purpose at the bequest of the donor. The fund is designed to be held in perpetuity and to keep the principal amount intact while using the investment income from dividends for charitable efforts.
It is like a permanent savings account. It is a pool of money that a church and its donors have set aside and invested for the really long term with no end date. The fund is intended to be held in perpetuity, its return supporting ministry for generations.
What is the Endowment Fund's Purpose?
Quite simply, it is for the financial support for the viability, vitality and sustainability of the life, mission, and ministries of CUCC. It is also an unceasing resource funded by bequest gifts of members and friends. In addition, it ensures enduring and expanding financial support for missions and ministries of CUCC. Lastly, it provides a legacy for our children and our children’s children.
Benefits of the Donor
- Fulfillment of charitable goals
- Charitable tax deduction
- Avoidance or reduction of capital-gains tax
- Income payments for life
- Tax-free income
- Reduction of federal estate tax
What Property Can You Donate to the Endowment Fund?
- Stocks & Bonds
- Real Estate
- Insurance Policies
- Retirement Assets
- Personal Property of Value (Vehicles, Authentic Pictures, Classic Books…)
Methods of Giving To The Endowment Fund
Outright Gifts: Gifts of cash, stocks, bonds, personal property or real estate to the CUCC Endowment Fund.
Bequest by Will or Trust: A gift designated in a will or trust, usually paid upon the donor’s death.
Life Insurance: The CUCC Endowment Fund can be named as the beneficiary of a life insurance policy, or the policy itself may be donated to the CUCC Endowment Fund. If the policy is paid, the donor’s tax deduction will generally be the replacement cost of the policy at the time of the donation.
Retirement Assets: Retirement assets may be expensive for heirs to inherit, yet naming the CUCC Endowment Fund as a beneficiary of a retirement fund may provide significant estate tax savings.
Bank Account: The CUCC Endowment Fund as a beneficiary on the donor’s bank account.
Life Income Gifts: These gifts pay a donor income for life, with the remaining principal paid to the designated endowment or organization. The donor receives a tax deduction for the charitable portion of the gift in the year the gift is made.
Charitable Gift Annuity: Annuities may be funded with cash or appreciated securities and provide fixed income payments for the life of the donor and/or another person (successively).
Charitable Remainder Trust: These irrevocable trusts may be funded with cash, securities, or real estate, with the donor enjoying fixed or flexible income payments for their lifetime.
Pooled Income Fund: Working much like a mutual fund, this fund accepts and mages gifts from many donors, then distributes each gift’s portion of the earnings to the designated life-income beneficiary(ies). Minimum gift is $2,000.
Life Insurance: The endowment fund can be named as the beneficiary of a life insurance policy, or the policy itself may be donated to the endowment fund. If the policy is paid, the donor’s tax deduction will generally be the replacement cost of the policy at the time of the donation.
Charitable Lead Trust: This gift provides current income to the Endowment Fund during the donor’s lifetime or for a specified term of years, after which the remaining principal is turned to the donor or his/her heirs. Payment to the Endowment Fund may be fixed or variable. Minimum gift of $100,000.
Whom Should I Contact Regarding More Information?
Rev. Gwendolyn V. Kirkland (Pastor of Stewardship)
Anthony E. Brown
Attorney Cathe Evans-Williams
Charleen Mills, CFO
Call Church 708.333.5955